The Pareto PM

I’ve been reflecting upon the product management discipline this last week. In less than a month it will be about 5 years since I chose a path to become a PM rather than my original path of software engineering. In this article, I want to talk about what I believe makes a good PM a great PM.

As I reflect upon the last 5 years, one of the biggest themes that sticks out is whether a PM is thinking in outputs or outcomes.

An early in career PM may be thinking purely in outputs. How many features can we build? How many bugs can we fix in this release? How many interviews should I do? And so on.

Later in career PM tend to think in outcomes. What features will bring the most impact this year? What bugs will solve most of our user’s issues? What type of interviews will bring answers our teams need?

This is what I can best define as a “Pareto PM”. For those unfamiliar, the pareto principle, also known as the 80/20 rule simply states that 80% of the outcomes come from 20% of the causes.

For products, this has held true in just about every product area I’ve worked in. Focusing on quality? What is the 20% of issues to address 80% of the loudest feedback? Focusing on innovation? What is the 20% of partner asks to support 80% of the feature release? Focusing on acquiring new customers? What is the 20% of churned painpoints to resolve 80% of future user adoption? Focusing on performance? What is the 20% of bottlenecks to resolve 80% of the performance?

Now, a pareto pm has much more than product based questions to worry about. A PM has many responsibilities best described as a product triad:

This is a grossly oversimplified venn-diagram of all the responsibilities a PM has, but as you can imagine, the pareto principle applies to many daily PM tasks:

• What 20% of team processes can be improved to increase 80% of product team output?
• What 20% of documentation can be written to answer 80% of new feature usage?
• What 20% of design reviews can be done to schedule 80% of future work on the backlog?
• What 20% of legal questions need resolved to unblock 80% of product progression?

A PM’s job is never done. In fact, a product is never “complete”. Many PMs & product teams get stuck in the “output trap” where they continue to measure their product’s success by outputs rather than outcomes. They focus on outputs rather than the value of their outputs. As you can imagine, when you begin to lose value, you lose customers. Great PMs see straight through this.

Great PMs think in terms of pareto’s principle. Everything they do should result in an outcome that is ultimately tied to value. They realize that products are simply the vehicle of value. They know that value can be delivered in a product in more ways than just features.

You know what the cool part about this value exchange is? It benefits both the business’s success and the customer’s outcomes. It’s literally a win-win. This is why you hear companies talk about being so customer obsessed that a restraining order might be needed. However, this is where I think many companies are wrong.

Being customer obsessed or customer centric does not always give you this win-win scenario. In most cases, it actually is detrimental to your product. At some point a pareto pm must lead and make unpopular decisions. It’s not the primary role of pm to always be customer focused such as what will land a quick sale for the sales team or what feature will keep a company subscribed for one month longer. Rather, it’s up to the pareto pm to prioritize the 20% right things today for the 80% of future customers tomorrow. In other words, you are empowering your customer centric teams to a much larger scale in the future.

That then brings the question. “How do we prioritize the right things?”. It’s rather simple. The pareto pm knows how to say no. They know how to stay focused on the right things by understanding their top-down allocation through a product vision. When a vision is defined and focused on the customer and the value exchange, it is truly empowering. It allows you to say no. It gives you meaning to every no. It empowers your product team to focus on the 20% to drive the 80% of outcomes.

There’s many ingredients to make a product vision even work in the first place though. The pareto pm needs to create a culture of empowering every individual, breakdown other products/competitors, understand the direction of the industry, know your unfair advantages, understand your customers behaviors, and get your whole team thinking in outcomes to name a few.

Now they must continuously ask “How might we?” utilizing pareto’s principle until they accomplish this vision. Once they’ve done so, they’ve brought the product & product team to the destination of empowerment. The job is still not done, but the work can now begin.